The Benefits of the Digital Supply Chain
SUPPLY PLANNING – MAN VS MACHINE
When it comes to supply planning, you may be highly experienced in micromanaging large numbers of moving parts. You may be meeting demand and you might be managing budgets just fine.
But are your methods agile and cost-effective? Do you meet demand by the skin of your teeth or are you confident in your inventory position? Could a machine outperform human best practice for supply planning, delivering a wealth of business improvements for you, your suppliers and most importantly, your customers?
Of course, when we say ‘machine’ we refer to supply chain visualisation software, specifically built to help you see, manage and instantly inter-relate more moving parts than even the most experienced supply chain manager could feasibly hope to control.
What can a computer do that I can’t?
The digitisation of supply chains can feel daunting, but in fact it is something worth embracing as early as possible in order to stay ahead of the curve. Technologies such as supply chain visualisation software are created to make businesses more agile and ultimately more profitable, and they often do this by outperforming human capabilities in areas which require the consumption, analysis and interpretation of vast amounts of data.
In the case of supply planning, a fully digitised platform can deliver a time-phased approach to maintaining a healthy, cost effective, lean and flexible inventory position. One which is capable of meeting demand estimated in accordance with data collected from previous annual demand patterns, market trends and other data sources.
Why should supply planning be time-phased?
The definition of ‘time-phased’ is ‘the distribution of activities, task milestones and resources over an appropriate timescale for the scheduled completion of a plan, programme or project.’ There are a number of benefits to this approach, when done accurately using digitised supply chain visualisation and management software:
- Purchasing costs are spread evenly throughout the period
- No panic purchases or paying for speed freight when demand outweighs the inventory position
- Better planning of logistics, warehouse space design and staff
- A more accurate manufacturing plan, with the right components or raw materials available when required
- A clear understanding of any supplier constraints before they affect your business
By hand, this process is incredibly time consuming, taking a skilled and competent individual or team of people to continuously monitor, evaluate and improve the plan. Even with the most efficient of team players, this is neither cost, nor time, effective when compared to a digitised alterative.
Further still, human error is to be expected when so many fast-paced variables are at play, not to mention the requirement to evaluate and apply market trends data, seasonality and ad hoc demand scenarios.
What does a digitised system monitor?
The capabilities of digitised supply chain visualisation and management software are seemingly limitless, monitoring and displaying what’s in stock already, supplier constraints, orders already placed, deliveries due in and lead times.
Meeting your purchasing needs at a highly detailed level, class-leading systems of this nature can even optimise level loading from key suppliers so that you are buying the right quantity of each component rather than bulk purchasing by the pallet. Your system will also highlight the percentage of order filled and trigger further orders at the right time, ensuring cost efficiency without jeopardising manufacturing or supply.
All of this is accurately calculated autonomously in real time, in accordance with data drawn from previous years of sales and other data sources, giving you a level of fluidity, accuracy and efficiency simply not possible if done manually.
For more advice on digitised forecasting and information on cloud-based supply chain management and demand planning software from Demand Solutions Europe, click here. Or why not connect with our sales and marketing director, Alex Young on LinkedIn?